Next video:
Loading the player...

The ROIC is used to measure how well a company is investing its capital. An advantage of viewing a company's ROIC is that it provides investors an overview of a company's management performance. When a company consistently shows a high ROIC, it is considered a good investment and its shares tend to trade at a higher market price.

 

Related Articles
  1. Trading

    Find Quality Investments With ROIC

    Return on invested capital is a great way to measure the true value produced by a company. Learn to use the ROIC metric and increase your chances of finding successful investments.
  2. Investing

    Lockheed Martin's 3 Key Financial Ratios (LMT)

    Learn about Lockheed Martin's business by investigating three important financial ratios that determine profitability, return and reinvestment needs.
  3. Investing

    Analyzing Verizon's Price & Profitability Ratios in 2016 (VZ)

    Learn about Verizon Communication and its key metrics, such as the price-to-earnings ratio, dividend yield, net margin and return on invested capital.
  4. Investing

    Analyzing GE's Price & Profitability Ratios in 2016 (GE)

    Learn about General Electric and its financial metrics that help investors analyze the company's relative valuation and profitability.
  5. Investing

    Johnson & Johnson's 3 Key Financial Ratios (JNJ)

    Learn about Johnson & Johnson and its financial ratios, such as operating margin, return on invested capital (ROIC) and capital outlays as a percent of sales.
  6. Investing

    Home Depot's 6 Key Financial Ratios (HD)

    Learn about important financial ratios used to determine the performance of retailer Home Depot; these give a quick snapshot of the company's profitability.
  7. Investing

    Solar City's 3 Key Financial Ratios (SCTY)

    Learn about SolarCity Corporation and its three key financial ratios that will help you understand its business and financial statements.
  8. Investing

    Disney's 4 Key Financial Ratios (DIS)

    Learn about the financial ratios that are important in understanding Walt Disney Company; analyze the company's past performance and evaluate its new business developments.
  9. Investing

    Celgene's 3 Key Financial Ratios (CELG)

    Learn about Celgene Corporation and its key financial ratios, such as the debt-to-equity (D/E) ratio, operating margin and return on invested capital (ROIC).
  10. Investing

    Toyota's 4 Key Financial Ratios (TM)

    Learn about important financial ratios for Toyota Motor Corporation that are crucial in evaluating the company's business and its financial statements.
Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an ...
  3. Salvage Value

    The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting ...
  4. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  5. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center